Norwegian core inflation came in at 6.0% year-on-year – spot on to Norges Bank’s view. Economists at Nordea now expect Norges Bank to hike in December.
December hike is on
Norwegian core inflation came in at 6.0 % YoY in October from 5.7% YoY in September. Norges Bank expected core inflation at 6.0% y/y while consensus was at 5.6%. We expected 5.3% YoY as we believed food prices would continue to fall. We were wrong.
Looking at headline inflation, it rose to 4.0% YoY from 3.3% YoY in September. Norges Bank expected 4.4% YoY.
Given the latest CPI print, Norges Bank will likely disregard the fall we saw in September. This means that a December hike is fully on with the NOK now around 4.5% weaker than expected. We therefore now expect Norges Bank to hike in December.